One of the world's fastest-growing oil producers, Brazil is set to join the OPEC+ oil bloc as of 2024, the coalition announced Thursday.
Brazil hopes to join the oil cartel in January after a technical analysis of the charter for cooperation, the country's energy minister said.
Still, the nature of participation of one of the world's top 10 producers and the largest oil producer in Latin America since 2016 remains unclear.
The move announced by the OPEC oil cartel makes an ally out of one of the key rivals to OPEC+, the world’s independent oil producers.
Ministers of the OPEC+ members, which include 13 OPEC nations headed by Saudi Arabia and 10 allied producers led by Russia, were meeting Thursday to discuss further output cuts to boost prices.
The International Energy Agency (IEA) says booming crude oil production in the United States and Brazil has been frustrating efforts by OPEC+ to rein in global oil supply.
Brazil's crude production hit a record 3.7 million barrels per day (bpd) in September, a near 17% increase from the same month last year and a 6.1% hike from August, according to pricing agency Argus Media.
President Luiz Inacio Lula da Silva's office confirmed receiving the OPEC+ invite during his trip to Saudi Arabia, but said he had not formally responded.
The president's office and the Mines and Energy Ministry did not say whether Brazil would participate as an OPEC+ observer or as a full participant in the group's shared production quotas.
Mines and Energy Minister Alexandre Silveira told his OPEC+ peers that Brazil was eager to formally enter the group at a future meeting in Vienna, after a technical review of its charter for cooperation.
"It's all set. But there is a phase of detailed analysis by our technical team of the document we just received, which is part of the protocol in Brazil," Silveira said in Portuguese during a virtual meeting, where his comments were met with a standing ovation from OPEC+ ministers.
In a statement, OPEC+ said it welcomed Silveira to the meeting, adding that Brazil "will join the OPEC+ Charter of Cooperation starting January 2024."
OPEC+ members are working to bring oil prices back up amid market oversupply and anticipated falling demand next year.
The cartel was born in late 2016 when Russia and nine others joined forces with the Saudi-led OPEC to prop up falling prices.
"Considering that Brazil is a large oil producer and is driving oil production growth it is important to have them on board, but it seems that they are not cutting production like Mexico, so would conclude with: good for OPEC+, less relevant for oil market balances," UBS analyst Giovanni Staunovo said.
The cartel faced its biggest crisis in 2020 as countries locked down due to the COVID-19 pandemic, sending oil demand plunging.
The group agreed in April 2020 to slash output by 9.7 million bpd in order to boost sagging prices.
It began to raise production again in 2021 as the market improved.
In the most recent meetings amid plunging prices, OPEC+ members have announced voluntary cuts to boost prices.
Since the end of 2022, the alliance has implemented supply cuts of about 5 million bpd with Saudi Arabia taking the lead.
